Moody's Investors Services: Credit Trends Commentaryhttp://webdev.credittrends.moodys.comThe Credit Market Trends Service is a Web-based Economic Service focused on the fixed income market. The service compiles economic data and commentary from Moody's expert economists and is released in a rolling fashion throughout the day, week and month.en-usFri, 20 Nov 2009 21:44 GMT120Limp Inflation Outlook Underpins Continued Government Efforts to Reflate the Economyhttp://credittrends.moodys.com/pro/article.asp?cid=119619http://credittrends.moodys.com/pro/article.asp?cid=11961911/20/2009Highly accommodative fiscal and monetary policy will persist in 2010 against a backdrop of low core consumer price inflation. This will allow further limited price appreciation for corporate credit.US Economic Indicators November 23rd -27thhttp://credittrends.moodys.com/pro/article.asp?cid=119618http://credittrends.moodys.com/pro/article.asp?cid=11961811/20/2009A look at next week's economic indicators which include home sales, personal income & spending, and durable goods orders.European Currencies Weaken vs. Dollarhttp://credittrends.moodys.com/pro/article.asp?cid=119607http://credittrends.moodys.com/pro/article.asp?cid=11960711/20/2009European bourses closed lower, while government bonds rose.Regional Survey Orders Trend Points to Extended Positive Momentum for Industrial Productionhttp://credittrends.moodys.com/pro/article.asp?cid=119590http://credittrends.moodys.com/pro/article.asp?cid=11959011/19/2009Consistently strong readings for new orders in regional activity surveys and the upturn in trade volumes have industrial production positioned in a long-term growth trend.European Credit Default Swaps Narrowhttp://credittrends.moodys.com/pro/article.asp?cid=119579http://credittrends.moodys.com/pro/article.asp?cid=11957911/19/2009Spreads on corporate default swaps have narrowed recently as economic and credit fundamentals continue to improve. Falling Rents Will Help Tame Core Consumer Priceshttp://credittrends.moodys.com/pro/article.asp?cid=119553http://credittrends.moodys.com/pro/article.asp?cid=11955311/18/2009The weak core inflation trend underscored by falling shelter costs give the FOMC justification to maintain its highly accommodative interest rate target.Market Wrap: Bourses Weak On U.S. Housing Startshttp://credittrends.moodys.com/pro/article.asp?cid=119546http://credittrends.moodys.com/pro/article.asp?cid=11954611/18/2009Gold posts a new record-high.October Correction in New Residential Construction Doesn't Effect Rising Surge Led by Single-Family Homes as Fundamentals for Demand for New Homes Sales Continues to Stabilizehttp://credittrends.moodys.com/pro/article.asp?cid=119545http://credittrends.moodys.com/pro/article.asp?cid=11954511/18/2009October new residential construction revealed a temporary correction in the consistent surge in year-over-year growth in new housing starts. Building permits and housing completions are currently running at about one-third to one-half their historical levels which will help to contain supply as demand trickles back into the market.Decision to Expand QE Supported by Seven BoE Membershttp://credittrends.moodys.com/pro/article.asp?cid=119543http://credittrends.moodys.com/pro/article.asp?cid=11954311/18/2009According to the minutes from the Bank of England's November monetary policy meeting, the decision to leave the main repo rate at 0.5% and to expand the asset purchase programme by £25 billion to £200 billion was supported by seven of the nine members of the monetary policy committee. One member called for no increase to be made to the asset purchasing programme, and one called for it to be increased to £215 billion. Surge in Industrial Production Confirms an End to the Recession; Total Capacity Utilization Improves as Technology Continues to Deterioratehttp://credittrends.moodys.com/pro/article.asp?cid=119519http://credittrends.moodys.com/pro/article.asp?cid=11951911/17/2009The 5-month consecutive improvement in industrial production and capacity utiulization will eventually be looked at as the bottom of the recession, following a June 2009 bottom.Producer Prices Fall in Line With Muted Fed Inflation Outlookhttp://credittrends.moodys.com/pro/article.asp?cid=119514http://credittrends.moodys.com/pro/article.asp?cid=11951411/17/2009The limp yearly rise in core producer prices for finished goods signals no immediate threat for consumer price inflation. At the same time, rising crude and intermediate good prices counter fears of increasing deflationary pressure.Market Wrap: Bourses Decline on Downbeat U.S. Production Datahttp://credittrends.moodys.com/pro/article.asp?cid=119509http://credittrends.moodys.com/pro/article.asp?cid=11950911/17/2009Sterling at a 2-month high against the euro.Discount Chains Lead Retail Sales … Home-Related Retail Sales Worsen … Philly Fed Survey Sees Q2-10 Return for Jobs Growthhttp://credittrends.moodys.com/pro/article.asp?cid=119487http://credittrends.moodys.com/pro/article.asp?cid=11948711/16/2009The comparative vigor of discount chain sales highlights the overarching importance of attractive pricing amid an unprecedented contraction of employment income. U.S. and Japan Send European Bourses Higherhttp://credittrends.moodys.com/pro/article.asp?cid=119482http://credittrends.moodys.com/pro/article.asp?cid=11948211/16/2009Pound to a 3-month high against the greenback.Close Encounter With a Double Dip Could Swell Credit Risk Premiahttp://credittrends.moodys.com/pro/article.asp?cid=119459http://credittrends.moodys.com/pro/article.asp?cid=11945911/13/2009On balance, recent projections of 2010's economic activity favor a further narrowing of still wide corporate credit risk premia. US Economic Indicators November 16th - 20thhttp://credittrends.moodys.com/pro/article.asp?cid=119451http://credittrends.moodys.com/pro/article.asp?cid=11945111/13/2009A look at next week's economic indicators which include data on prices, home building, and industrial production.European CDS Spreads Narrowhttp://credittrends.moodys.com/pro/article.asp?cid=119450http://credittrends.moodys.com/pro/article.asp?cid=11945011/13/2009European bourses rose following better than expected corporate earnings and reports of an airline merger.ECB's Lack of Consensus, Transparency Complicates Policymakinghttp://credittrends.moodys.com/pro/article.asp?cid=119447http://credittrends.moodys.com/pro/article.asp?cid=11944711/13/2009The European Central Bank has been divided on the proper response to the deep recession and will be divided on the response to the recovery. Distressed Index Falls to Pre-Crisis Levels, Shifting Default Focus to Lagging Sectorshttp://credittrends.moodys.com/pro/article.asp?cid=119424http://credittrends.moodys.com/pro/article.asp?cid=11942411/12/2009Strong investor appetite for high yield debt has narrowed spreads to pre-financial crisis levels, reducing projected default rates. Remaining sectors that project to historically high default rates one year from now are largely those in secular declines prior to the recession.Declining Trend of Jobless Claims Improves Outlook for Credit Spreads … Plunge by Homebuyer Mortgages Implies Economy Still Needs Federal Helphttp://credittrends.moodys.com/pro/article.asp?cid=119419http://credittrends.moodys.com/pro/article.asp?cid=11941911/12/2009Compared to the 502K of the first week of November, jobless claims need to break under 400K for jobs to grow materially. High Yield Borrowings: Bonds Soar While Leveraged Loans Strugglehttp://credittrends.moodys.com/pro/article.asp?cid=119418http://credittrends.moodys.com/pro/article.asp?cid=11941811/12/2009Recent developments signal the return of growth to leveraged loan issuance in 2010.ECB's Outlook Grows More Optimistichttp://credittrends.moodys.com/pro/article.asp?cid=119415http://credittrends.moodys.com/pro/article.asp?cid=11941511/12/2009The European Central Bank sounded optimistic about the euro zone's recovery in its November monthly bulletin.Euro, Swiss Franc and Sterling Weaken vs. Dollarhttp://credittrends.moodys.com/pro/article.asp?cid=119414http://credittrends.moodys.com/pro/article.asp?cid=11941411/12/2009European government bond markets lost ground as equities rose.High Yield Borrowing Ought to Grow by 10% to 15% Annually in 2010 … East Asian Economies Gain Speedhttp://credittrends.moodys.com/pro/article.asp?cid=119391http://credittrends.moodys.com/pro/article.asp?cid=11939111/11/20092010's outlook for high yield borrowings receives support from how high yield debt issuance still lags what otherwise might be inferred from its historical relationship with the outstandings of high-yield debt.Sterling Weakens vs. Dollar, Eurohttp://credittrends.moodys.com/pro/article.asp?cid=119385http://credittrends.moodys.com/pro/article.asp?cid=11938511/11/2009U.K. government bonds and European bourses closed higher.